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Internal market commissioner Michel Barnier said that the measures would "encourage shareholders to engage more with the companies they invest in, and to take a longer-term perspective of their investment".

"To do that, they need to have the rights to exercise proper control over management, including with a binding 'say on pay'."

Under the regime, companies would have to put their remuneration policy to a legally binding shareholder vote. The policy would need to include a maximum level for executive pay and explain the ratio between average wage levels of employees and executive pay. It would also need to be tied to the long-term interests and sustainability of the company.

"There is an insufficient link between management pay and performance and this encourages harmful short-term tendencies," says the commission.

Although the proposal does not include a cap on executive pay, unlike the EU's rules for the banking sector, it is the latest EU attempt to link pay to the long-term performance of a company and to tackle the corporate bonus culture.

Bank bonus rules adopted in spring 2013, as part of a law aimed at increasing the amount of capital banks must hold on their books, say that executives can receive up to double their salary in bonuses if a majority of shareholders agree.

EU lawmakers have also adopted pay caps for hedge fund and investment managers.

"I cannot explain this enormous gap between the level of pay and corporate governance, and it does leave you with a pretty bitter taste in your mouth when you see the excessive levels of pay in some cases," said Barnier.

John Davies of the Association of Chartered Certified Accountants welcomed the plan as "a step forward towards increasing transparency as regards shareholder identification and shareholder oversight".

"The proposed 'say on pay' will give shareholders a new right to influence and approve their company's remuneration policy. It is important to encourage shareholder commitment that is in line with long-term company interests and ensures better operating conditions for listed companies," he added.

However, with the European Parliament holding its last plenary session next week before going into recess ahead of May's European elections, negotiations on the bill will not start until September.

Meanwhile, the commission also unveiled plans to harmonise EU rules on the creation of small businesses to make it easier for them operate across the 28-country bloc.